Home Equity Loan Basics
A home equity loan allows homeowners to get loans by using the equity in their home as collateral. Using the equity in your home is a powerful tool that can help you improve your overall financial well being and pay off high interest loans, debts, and credit cards. Ask 7th Level Mortgage if home equity loans are right for you. Home equity loans usually require relatively good, also a lower loan-to-value than an FHA and income to debt rations on the conservative side Home equity loans can also be referred to as to as second mortgages, they are secured against the value of the property, just like a traditional mortgage.
Home equity loans can be for a shorter term than first mortgages. Home equity loan can be used for any purpose and do not have to be associated with home repairs as some may believe. Home improvement loan is different than home equity loans and need to be used for the home.
There are different types of home equity loan, and it’s always best to consult with your loan officer to determine which is right for you.
Home Equity Loans or Home Equity Line of Credit?
A home equity loan can be issued as one lump sum in the form of home equity loans or used as a revolving home equity line of credit (HELOC) similar to a checking account.